(DailyDig.com) – On Tuesday, Jan. 24, the DOJ and eight states (CA, CO, CT, NJ, NY, RI, TN, and VA) filed an antitrust complaint against Google. They said that Google’s purported monopoly on the whole business of internet advertising is a hardship for advertisers, consumers, and the federal government.
Attorney General Merrick Garland claimed that Google has engaged in anti-competitive behavior for 15 years, stalling the emergence of alternative technology and manipulating the mechanics of internet ad auctions to encourage advertisers and publishers to utilize its products. By doing this, Google engaged in monopolistic behavior, which drastically undermines competitors in the ad tech business.
The government said in the lawsuit that Google is attempting to weaken or destroy competitors in the online ad industry. They do this through mergers and the coercion of advertisers to use its services by making competitors’ offers difficult to use.
“Monopolies threaten the free and fair markets upon which our economy is based. They stifle innovation, they hurt producers and workers, and they increase costs for consumers,” Garland said at a news conference on Tuesday.
Google, which has yet to respond, has contended that its advertising business is not a monopoly since it competes with Facebook parent firm Meta Platforms Inc., Amazon.com Inc., Comcast Corp., and others.
According to Garland, Google is in control of the technologies that the majority of large website publishers use to sell advertising space, as well as the main ad exchange that connects publishers and advertisers when ad space is sold. As a result, website owners earn less and marketers pay more.
The lawsuit, filed in federal court in Alexandria, Virginia, requires that Google sell off the businesses that handle digital display advertising, leaving only search, which is its core business, and other products and services such as YouTube, Gmail, and cloud services.
The lawsuit filed on Tuesday comes as the US government seeks to limit Big Tech’s supremacy. Such legal action may take years to resolve, and Congress has not enacted any recent legislation aimed at limiting the power of the tech industry’s top firms.
The Justice Department and eight states filed an antitrust suit against Google on Tuesday, Jan. 24, seeking to shatter its alleged monopoly on the entire ecosystem of online advertising as a hurtful burden to advertisers, consumers and even the U.S. government.
For 15 years, Attorney General Merrick Garland said that Google has pursued a course of anti-competitive conduct that has stalled the rise of rival technologies and manipulated the mechanics of online ad auctions to force advertisers and publishers to use its tools. In so doing, he added, Google engaged in exclusionary conduct that has severely weakened, if not destroyed, competition in the ad tech industry.
The government alleged in the complaint that Google is looking to neutralize or eliminate rivals in the online ad marketplace through acquisitions and to force advertisers to use its products by making it difficult to use competitors’ offerings. It’s part of a new, if slow and halting, push by the U.S. to rein in big tech companies that have enjoyed largely unbridled growth in the past decade and a half.
“Monopolies threaten the free and fair markets upon which our economy is based. They stifle innovation, they hurt producers and workers, and they increase costs for consumers,” Garland said at a news conference Tuesday.
The suit, the latest legal action brought by the government against Google, accuses the company of unlawfully monopolizing the way ads are served online by excluding competitors. Google’s ad manager lets large publishers who have significant direct sales manage their advertisements. The ad exchange, meanwhile, is a real-time marketplace to buy and sell online display ads.
Google, which has yet to comment, has argued its ad business is not a monopoly because it must compete with Facebook parent company Meta Platforms Inc. Amazon.com Inc. Comcast Corp. and others.
Garland said Google controls the technology used by most major website publishers to offer advertising space for sale, as well as the largest ad exchange that matches publishers and advertisers together when ad space is sold. The result, he added, is that website creators earn less and advertisers pay more.
The lawsuit, filed in federal court in Alexandria, Virginia, demands that Google divest itself of the businesses of controlling the technical tools that manage the buying, selling and auctioning of digital display advertising, remaining with search, its core business, and other products and services including YouTube, Gmail and cloud services.
Alphabet Inc., Google’s parent company, said in a statement that the suit doubles down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow. Digital ads currently account for about 80% of Google’s revenue, and by and large support its other, less lucrative endeavors.
Tuesday’s lawsuit comes as the U.S. government is increasingly looking to rein in Big Tech’s dominance, although such legal action can take years to complete and Congress has not passed any recent legislation seeking to curb the influence of the tech industry’s largest players.
Google, the lawsuit states, has over the past 15 years used acquisitions and market power across adjacent ad tech markets to quash the rise of rivals, tighten its control over the manner and means through which digital advertising transactions occur, and prevent publishers and advertisers from working effectively with Google’s rivals.
The states taking part in Tuesday’s suit include California, Virginia, Connecticut, Colorado, New Jersey, New York, Rhode Island and Tennessee.
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